The housing market remains challenging but there are more stable times ahead
The latest report from the Royal Institution of Chartered Surveyors (RICS) depicts the continuation of a challenging market but a more stable situation in a year.
According to the UK Residential Survey, interest rates continue to hamper mortgage affordability, and the disparity between tightening lettings supply and rising demand is still causing rental price rises.
The headline new buyer enquiries figure reported a reading of minus 39 per cent in September.
Although still consistent with weak demand, the latest reading is marginally less negative than the minus 46 per cent seen in August.
The September results for agreed sales remain negative, with a figure of minus 37 per cent reported.
That said, this is again slightly less downcast than readings of minus 46 per cent and 45 per cent seen in August and July.
For the coming three months, respondents continue to envisage a decline in sales volumes.
However, 12-month sales expectations returned a net balance of a plus three per cent increase (up from a minus five per cent drop last time), signalling a much more stable trend in sales volumes emerging over the year ahead.
At the end of September, RICS launched its manifesto for the built environment, ahead of the UK party conferences.
RICS called for the next UK government to hit housing targets by setting a housing strategy to help increase the supply of rented homes.
Tarrant Parsons, senior economist at RICS, said: “With mortgage affordability still incredibly stretched, it is unsurprising that buyer activity across the housing market remained subdued in September.
“Although the decision to pause monetary policy tightening a few weeks ago provided a glimmer of relief for the market, interest rates are likely now set to remain on hold for a prolonged period.
“As such, it appears there is little prospect of trends deviating much from the recent picture in the immediate future.
“That said, the outlook a little further ahead has improved slightly, with 12-month sales expectations moving out of negative territory for the first time in several reports.”